Gold prices continued to fall during Asian trading on Monday, adding to last week’s decline as improving sentiment over U.S.–China trade negotiations dampened demand for safe-haven assets. Traders are also focused on the upcoming Federal Reserve policy decision, with markets widely anticipating a rate cut later this week.
Spot gold slipped 1.3% to $4,060.80 per ounce by 00:44 ET (04:44 GMT), while U.S. gold futures fell 1.6% to $4,072.60. The yellow metal recently ended a nine-week rally after hitting record highs above $4,300/oz, as traders booked profits amid easing geopolitical risks and expectations of monetary stimulus.
Trade Breakthrough Pressures Gold
The pullback follows progress in trade talks after U.S. and Chinese negotiators reached a preliminary framework over the weekend on the sidelines of ASEAN meetings in Malaysia. The agreement is set to be finalized when Donald Trump and Xi Jinping meet in South Korea later this week, aiming to extend the trade truce and potentially pave the way for a broader deal.
“The threat of the 100% tariff has gone away, as has the threat of the Chinese initiating a worldwide export control regime,” said U.S. Treasury official Scott Bessent, suggesting that the risk of renewed trade escalation had eased.
Improved risk appetite has weighed on gold’s safe-haven appeal.
Fed Rate Cut Expectations Provide Some Support
Losses in gold remain limited, however, by expectations that the Fed will lower rates at its October 29 meeting. A softer-than-expected U.S. CPI report last week strengthened the case for a 25-basis-point cut, with investors now awaiting signals on whether further easing may follow before year-end.
Lower interest rates typically support gold by reducing the opportunity cost of holding non-yielding assets and pressuring the U.S. dollar, making the metal more attractive to international buyers.
Broader Precious Metals Dip as Copper Surges
Other precious metals also moved lower on Monday, dragged down by the risk-on sentiment. Silver futures declined 1.4% to $47.91 per ounce, while platinum futures eased 0.9% to $1,587.10 per ounce.
In contrast, copper prices climbed sharply. Benchmark copper futures on the London Metal Exchange advanced over 1% to hit a record high of $11,078.00 per ton, while U.S. copper futures gained 1.4% to $5.19 per pound. The rally has been supported by the ongoing shutdown of Freeport-McMoRan Inc.’s Grasberg mine in Indonesia since early September, as well as optimism surrounding a potential U.S.–China trade agreement.
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